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Friday, August 11, 2017

Why They Sell Vacuum Cleaners Door-To-Door in Poor Neighborhoods

The rawest deals are offered to the poor, who snap them up. Hence they are poor. It is a vicious cycle.

One of the greater educational experiences in my life was watching my older brother struggle after college trying to find a career or even a job. I was fortunate that I was already working for GM, and when I left there, quickly found a job with Carrier. But I was studying Engineering, not "Communications" and there are not a lot of jobs out there for a "Communications." Well, there are some jobs, but there are far too many applicants.

Anyway, my brother stumbled around for a few years before he went back to college and got a Masters degree - the new Bachelors degree today. And between colleges, he fell into some of these con-jobs and struggled. The first was the "freezer scam" which I talked about before. They put you in a "boiler room" and get you to call people to sell them a side of beef. Since most folks don't have a freezer to hold all that beef, you sell them a freezer too, on time, of course, and for double what they sell for at Sears.

The other con-job he fell into was selling vacuum cleaners door-to-door. I "interviewed" with a similar place (and quickly left) that wanted me to sell cassette tapes door-to-door. I quickly realized it was a scam, when they wanted us to sing the company song. Yes, the vacuum cleaner people do that, too. It isn't that the products are no good, only that the way they are marketed sucks - high-pressure, cold-calling, door-to-door, often by fly-by-night operators who never pay their salesmen.

One of my brother's observations was telling - "They didn't take us to the rich neighborhoods to sell these $600 vacuum cleaners, but to the poorest places in town! Places where people had plastic on their windows and junk cars in the driveways! It made no sense to me!"

But, alas, it did make sense. The very rich have a maid, and aren't interested in some door-to-door salesman, even if he got by the security fence and trained guard dogs. They buy their appliances at a store and can afford the best. They didn't get rich buying stuff "on time" from some cold-calling high-pressure salesman.

But the poor, that's all they do, which is why you see some of the nicest cars in the poorest neighborhoods (along with the best Christmas displays, natch!). You can sell them anything and they will buy, if you tell them it is only $12 a month (for the rest of their lives).

I was thinking about this the other day with regard to the Elio car - which is now slated for production in the fourth quarter of 2019 - almost a decade after the idea was introduced. It is looking like it will never happen and in fact, may have been a con-job from the get-go, as the insiders are making a lot of money in the deal, but nothing other than blog entries actually seems to be getting done.

The folks who put down non-refundable deposits were by and large fairly poor people. Middle-class and lower, some college students, and one even a high-school student wanting to buy "his first car." Of course, he is in college now and already bought a car, not having time to wait for dream cars to be built. But they all lost their deposits - some $1000 or more, which is a lot of money to someone in that income level.

People who could least afford to lose money, lost money on this deal. The middle-class and up are not buying tiny three-wheeled cars. They can afford a regular car, and they know better than to give a non-refundable deposit for a car from a company that has no cars or history of making cars. The rich save speculation for the stock market - and even then, only on things that seem pretty sure, not wild-eyed crazy schemes. That's how they become rich - not by "exploiting the masses" but by not being exploited themselves.

The very rich are rarely targeted as victims for scams. Sure, Bernie Madoff ripped off a few people, but when you read about the victims of his con, you realize these were not Billionaires he was scamming, but more middle-class people who came into some money and thought Bernie would make them rich, in some mysterious way, and weren't curious enough to ask questions as to why and how. When poor people come into money, they don't have it for very long. Ask any lottery winner in the trailer park.

But the Madoffs of the world are the exception to the rule. Most scams and cons are aimed at the poor and the near poor. I wrote about the "Invention Broker" scam many times, and it has been around for decades. They promise to make people rich from their inventions, but instead just take $5000 to $10,000 from their victims. One poor guy I met, borrowed $5000 from his Grandmother to give to an invention broker. He was living with his Mom, unemployed, but still managed to get five grand.

I'll say it again and again until I am blue in the face - the poor don't need money, they need to educate themselves on how to use money. A lot of money passes through the hands of a "poor" person. They make good money in many cases, they just can't hang on to it. You read about these kids in the fracking fields, making $150,000 a year or more - sometimes far more - and spending it all and borrowing more. When the wells tap out and the jobs go away, they are bankrupt, even after having earned over a million dollars in a few short years.

Payday loans, rent-to-own furniture, check-cashing stores, sleazy used car dealers, liquor stores selling fifths of cheap booze - they all predominate in the poor neighborhoods, because poor folks are the only ones who will bite on these poor deals. Scams and cons are aimed at the poor, because they are the most likely to bite on them.

So, in a nutshell, that's why they left my brother on a street corner in a rural ghetto, on a wintry day, lugging a 60-lbs vacuum cleaner and accessories door-to-door for eight hours. He had a better shot at selling to the poor than he ever would have had, selling to the rich or even middle-class.

This is, of course scandalous. You should be outraged that these sort of cons are aimed at the folks who can least afford them! You should be marching on Washington! Writing your Congressman! Protesting the White House!

Of course, chances are, you aren't. Because you work for the credit card company that offers odious deals to the poor, or for the sub-prime car finance company that writes them car loans, or the car dealer that pressures them to buy a new Camaro, even though you know they will default within 12 months. Odds are, if you are middle-class, you have some connection to this exploitation. And even if you don't, maybe you voted for the candidate who promised to "reduce regulations that are strangling legitimate businesses!" which means, of course, reducing regulations that would protect consumers, particularly poor consumers.

But it isn't all bad news. In fact, there is a big chunk of good news in this. If you take a look at all the shitty deals offered and aimed at the poor and just not take any of them, you can get ahead in life. As I noted in an earlier posting, you can learn to spot these things from 100 yards awayjust from how they are marketed to you. When they talk down to you and offer "Sales!" and "Bargains!" and "Savings!" you pretty much know they are trying to fuck you.

I get cards in the mail from the cable company and the dish company, desperately wanting me to sign up for $100-a-month cable TeeVee. The way they package the deal is so odious, with come-on pricing and fake discounts and whatnot - and lots and lots of fine print, of course! I toss this crap in the trash. Television is just garbage - more ad time than air time.

But a lot of the middle-class today seems entranced by this carnival-barker type of advertising and come-ons. Middle-class people actually believe that cars go "on sale" on a certain date and cost less one day than the day before. People of higher classes are throwing more and more of their wealth away these days, and then wondering where it all went. The middle class is acting poor and thus becoming poor. It is no big mystery to me why we have income disparity.

The evil 1%'ers didn't take our money away, we gave it to them, willingly and with our blubbering thanks. In return, they gave us shiny trinkets, beads, mirrored glass, and jet-skis.